The Court of Cassation has considered whether company insolvency proceedings may be extended to a managing director and shareholder who has made payments to himself from the company's bank account.
Background
Oral arguments at the U.S. Supreme Court in Harrington v. Purdue Pharma L.P. happened on December 4, 2023. Here is a link to the official transcript of such arguments.
My Impression
I’ve read that transcript—and still don’t know what the Court is going to do.
But based on the comments/questions of the justices (which are summarized and compiled below), I do have one impression:
Desperate people do desperate things. And desperation leads even good people astray.
So it is in the world of financial stress. Desperate people do desperate things: like providing sloppy financial statements to creditors, failing to assure that all collateral proceeds go to the proper place, and fudging on the truth here-and-there.
Das Oberlandesgericht (OLG) Düsseldorf hat mit einem aktuellen Urteil (27.07.2023 – 12 U 59/22) seine eigene Rechtsprechung bestätigt, nach der die regulären Anforderungskriterien an die Überschuldungsprüfung bei Start-ups nicht uneingeschränkt Anwendung finden können.
Hintergrund – Kriterien der Überschuldungsprüfung
We hear a lot these days about bankruptcy venue abuse via corporate-entity manipulation shortly before bankruptcy filing.
Here’s the latest opinion on that subject—which allows Debtor’s choice of venue to stand, based on a newly-created entity:
Is an involuntary bankruptcy, filed by an owner/creditor of the Debtor, filed in good faith or in bad faith?
That’s the question before the U.S. Supreme Court on which it denied certiorari on October 30, 2023 (Wortley v. Juranitch, Case No. 23-211).
Here’s the gist of the case.
On 15 November 2023, the Temporary Act on Transparency of Expedited Liquidation (Turbo Liquidation Act) will enter into force. It aims to increase trust in the expedited liquidation procedure by improving its transparency, the legal protection of creditors and combatting the abuse of the procedure.
Background
The Federal Court of Justice has lowered the threshold for the approval of an insolvency plan by the insolvency court.
Background
The English Court has, for only the second time, made a compensation order under the Company Directors' Disqualification Act 1986 against a disqualified director.
Background
The U.S. Trustee is on a crusade to eradicate every type of third-party release from all Chapter 11 bankruptcy plans—no matter what the facts or circumstances might be.
It’s a policy based on the idea that, if the Bankruptcy Code doesn’t specifically and explicitly authorize something, then that something cannot be done . . . ever . . . under any circumstances . . . no matter what . . . period . . . end of story.
We now have another manifestation of that bright-line and unyielding position. Fortunately, the Bankruptcy Court rejects the U.S. Trustee’s objection.